The high rate of smoking in schizophrenia, the improvement in cognition with tobacco use and the deterioration in cognition with tobacco withdrawal suggests that smoking may improve cognitive deficits or medication side effects. One manifestation of these cognitive deficits is auditory sensory gating, which measures suppression the evoked response to the second of two auditory stimuli. It is diminished in schizophrenia and is associated with impairment in attention and perceptual disturbances. This inhibitory process is associated with the 7 nicotinic acetylcholine receptor (7nAChR), which can be a target for pharmacotherapy in schizophrenia. We hypothesize that the alpha-7 nicotinic receptor agonist tropisetron may improve cognitive and perceptual disturbances and symptoms in schizophrenia when added on to the atypical neuroleptic risperidone. This 12-week, double-blind, randomized, placebo-controlled trial adds tropisetron (10 mg) or placebo on to 6 mg risperidone in 200 first-episode Chinese schizophrenics living in Beijing. Six Specific Aims assess whether tropisetron can: 1. ameliorate cognitive deficits as assessed by the MATRICS, 2. alleviate negative psychotic symptoms, 3. reduce the side effects of risperidone, 4. reverse the abnormality in P50 inhibition, when present, 5. improve cognitive impairments in the same patients who normalize P50 inhibition, 6. reduce nicotine use (tobacco smoking) among those schizophrenics who smoke, which is a planned stratification with half smokers and half non-smokers. Our Preliminary Data support the efficacy of tropisetron in normalizing the P50 abnormality of schizophrenia, and we are further evaluating its optimal dosing for improvement in cognitive functioning. We have an IND pending for tropisetron, and it is potentially available in the United States through the manufacturer (NabovanD, Novartis Pharmaceuticals Ltd.) Finally, we have validated Chinese neuropsychological assessment tools to use in Beijing, where we have had previous success in conducting large pharmacotherapy trials.